Outsourcing is not working and it hurts working Tennesseans

Since August 2015, Gov. Bill Haslam’s administration has pushed a radical experiment in outsourcing that would turn thousands of state facilities workers jobs, millions of square feet of Tennesseans’ real estate, and hundreds of millions of taxpayer dollars to the multinational giant JLL. There has been widespread opposition to the outsourcing plan. Facilities services workers, faculty, and staff have significant concerns that outsourcing will compromise the quality of services on which effective teaching, research and service rely. Students have spoken up about fears for safety if a revolving workforce replaces the workers they know and trust. …

The state of Tennessee has signed a facilities management contract to help the state provide the best service to citizens and employees at the lowest possible cost for taxpayers. The contract was awarded to Jones Lang LaSalle (JLL) for five years with up to five one-year extensions. It allows the state of Tennessee’s various agencies and institutions to utilize JLL’s professional facilities management services. The potential scope covers over 7,500 state run properties spanning 97 million square feet. …

A judge has ruled in favor of a media group that sued the state of Tennessee to release records about its attempt to outsource services at Fall Creek Falls State Park. The Tennessee Coalition for Open Government says Davidson County Chancellor Bill Young on Tuesday ruled that the state must produce records to City Press Communications LLC, parent company of the Nashville Scene and the Nashville Post, and reporter Cari Wade Gervin. …

Tennessee moved forward with a controversial plan to outsource jobs at public colleges Friday when officials finalized a contract with a corporation that already handles a sizable amount of state business. Under the contract, JLL — which currently manages about 10 percent of state facilities — will oversee the potential expansion of outsourcing at college campuses, state parks and prisons. It is a pivotal moment for the proposed expansion, which has been in the works for two years. …

A push by Gov. Bill Haslam’s administration to outsource hospitality services at a Tennessee state park has drawn no bidders. Tennessee Department of Environment and Conservation spokeswoman Kim Schofinski says that no one bid on the proposal at Fall Creek Falls State Park, located on the Upper Cumberland Plateau in Van Buren and Bledsoe counties. TDEC planned to award the winning bidder $20 million to raze the park’s inn and build a new one. The Tennessee State Employees Association and park workers opposed it. …

Seventy-five state lawmakers have signed a letter urging Gov. Bill Haslam’s administration to postpone a plan to outsource jobs on college campuses and other state-owned property, delivering yet another blow to the controversial proposal. In the letter to Finance and Administration Commissioner Larry Martin, signed by Republicans and Democrats from both chambers, the lawmakers ask to delay the outsourcing plan to allow “enough time to address concerns from the General Assembly.” … This is only the latest sign of deep reservations surrounding the project, which Haslam has championed against wide-ranging criticism for more than a year. Workers’ rights advocates, including a union representing campus workers, have blasted Haslam for prioritizing money over state workers and their families. College leaders have predicted the change would hurt services on campus. …

Tennessee’s state government has inked a sweetheart deal with a company linked to the state’s billionaire governor to privatize thousands of facilities and management jobs at colleges, prisons, and other public buildings. It’s being touted by some officials in other states as a model for the nation. The $330 million, five-year contract covers custodial services, groundskeeping, and repair and maintenance work. Government officials say that each public facility can choose to only partially comply, or opt out, keeping their employees on the public payroll. “If they’re happy with business as usual, there’s nothing to do,” said Michelle Martin, a spokeswoman for the office that issued the contract. …

Real estate giant Jones Lang LaSalle has been selected as the winning bidder for Republican Gov. Bill Haslam’s plan to privatize property management on the campuses of the Tennessee’s public colleges and universities. The Chattanooga Times Free Press reports (http://bit.ly/2nwO7Dh) the Chicago-based company that already manages a large number of general state government buildings beat out proposals by Aramark and Compass Group. It’s not yet clear how many campuses will choose to participate in the privatization plan. Final cost details won’t be known until the five-year contract is signed. …

Despite $26 million in savings reported by state administration officials, some lawmakers and state employees remain skeptical or outright opposed to Gov. Bill Haslam’s effort to privatize many state agencies or operations within state government. Privatization of facility management, especially at public colleges and universities, has been a sort of sidecar initiative of Haslam for the past three years, in an effort to make state government more efficient and reduce costs. But many state workers still fear they will either lose their job or the areas that some have committed their lives to will suffer in quality. Larry Martin, state finance commissioner, was flanked by several officials from his department and told a Senate Oversight and Investigations Committee on Wednesday that the governor’s plan is working.

… Sen. Jeff Yarbro, D-Nashville, said he’s not been able to fully ascertain how the state arrives at the data it does regarding its overall savings, and requested that information from Martin and Hull. He questioned the data, specifically as it relates to the labor force, where the savings have not come. … Sen. Janice Bowling, R-Tullahoma, also questioned the notion of privatization, saying that it’s almost impossible for the state to restart or regain the management of those services once they’ve been outsourced to private companies. Representatives from the United Campus Workers offered some of the sharpest criticism to the privatization proposal from Haslam’s office, which has yet to be finalized and was indefinitely delayed last week. Melanie Barron, an organizer with UCW, said the request for proposal laid out by Haslam is “rife with loopholes” and despite promises from Haslam and other state leaders that agencies will be able to opt out of the RFP, little clarity about how to opt out has been provided. … The RFP for public facility management, which is separate from a different RFP to manage Fall Creek Falls State Park facilities, closed at the end of February. The state intends to issue a letter of intent to award at the end of March, Martin said. …

Gov. Bill Haslam is gambling with our tax dollars and Tennesseans’ lives. His outsourcing scheme involves eliminating up to 17 percent of current state employees’ jobs at state college and universities, parks and elsewhere. Outsourcing public jobs will result in great profits for private corporations but less oversight, lower quality, and the elimination of all accountability for citizens. The tragic school bus accident in Chattanooga is an unfortunate illustration of this fact. Hamilton County Schools contracted with Durham School Services, a private company, to operate its school buses. After 36 injury crashes in Tennessee since 2014, Durham was still transporting children. … Haslam’s steadfast outsourcing efforts, in the face of statewide opposition, stand in stark contrast to his other endeavors. For instance, his administration spent 18 months crafting Insure Tennessee, a plan supported by a majority of Tennesseans. Though Haslam publicly professed a passion for the cause, he exerted such little effort behind the scenes that he willingly raised the white flag to a vocal minority within his own party after less than three days of a special session. … These lackadaisical efforts on healthcare and transportation are easily contrasted with Haslam’s exhaustive efforts on outsourcing, a solution in search of a problem. Our governor created a new office focused solely on outsourcing and focused the bulk of his energies on an effort to pay private corporations hundreds of millions of dollars to perform jobs that state employees already do well and reliably. …

Tennessee Democrats say they’re still not sold on the benefits of potentially outsourcing thousands of state jobs at college campuses, parks and prisons. They’re calling for yet another round of analysis on the proposal, even though two so far have found it could save the state more than $35 million a year. State officials were the first to come up with that estimate for what Tennessee could save from privatizing jobs currently done by public employees. But when questions were raised about their analysis’s validity, Nashville-based KraftCPAs stepped in. And after reviewing the state’s calculations for several weeks, the firm has decided Gov. Bill Haslam’s administration was more or less correct. That doesn’t satisfy state Sen. Lee Harris, D-Memphis. He wants an out-of-state firm brought in to take a third look. He notes that Kraft has done work for Haslam’s campaign and that some Kraft employees have made donations to it — connections, Democrats say, call Kraft’s independence into question. …

An outside firm hired by Gov. Bill Haslam’s administration agrees that privatizing maintenance work at public colleges and universities could save $35 million per year. Haslam’s outsourcing advisers and consultants have touted the outsourcing plan as a way to save money while protecting the jobs of all currently employed campus maintenance workers who are deemed to be “qualified and productive.” The outside review was conducted by KraftCPAs PLLC.

Saving taxpayer money is the main selling point behind every proposal to outsource a state service. But, when analyzed, outsourcing is often found to be more expensive than promised. For example, in January 2012 the state paid Jones Lang LaSalle $1 million to assess the condition and management of state properties. That November, the state expanded JLL’s contract to include procuring outside leases, a job previously handled by state employees. JLL would also receive a 4 percent commission on any leases it procured. By April 2013, funding for the contract had increased from $1 million to $7.6 million. In June 2013, Tennessee signed a $330 million, five-year contract with JLL to outsource the facilities management of all state buildings. In November of 2013, the state comptroller found JLL’s contract “created an organizational conflict of interest whereby Jones Lang LaSalle can profit from its own planning recommendations.” … In 2014, the state signed a $276 million contract with Trousdale County for a 2,400-bed private prison for Corrections Corporation of America. This contract also includes a 90 percent occupancy guarantee for CCA for per diem fees, which means if the private prison doesn’t remain above 90 percent occupied, taxpayers will pay per diem fees for empty beds. The contract also guarantees annual 2.5 percent operating per diem rate increases. In contrast, state employees do not receive guaranteed pay increases. … Tragically, in July, a man committed suicide by jumping off the Tennessee Tower in Downtown Nashville. According to a WSMV report, “Security at the tower falls under the state’s General Services division. They contract with private security companies Walden Security and Allied Barton.” In August, an accident at a Tennessee county fair sent three children plummeting 45 feet to the ground, severely injuring one. The Associated Press reported, “The state relies on private inspectors hired by operators and other states’ regulators to determine whether roller coasters, zip lines and Ferris wheels are safe.” State employees used to handle this work. In conclusion, as taxpayers, we must ask harder questions and demand more oversight on any contracts that outsource a state service. The notion of cost savings from outsourcing is simply no longer credible.

Donald Trump isn’t the only one who won’t release his tax returns. Tennessee Governor Bill Haslam, whose family owns the Pilot Flying J chain of truck stops, has refused to release his since running and being elected in 2010. It wouldn’t matter so much if Haslam were your run-of-the-mill governor. But he’s the country’s richest politician, with a net worth of $2 billion. … It matters because Haslam has a plan that could plunge thousands of state workers into poverty. Since being elected, he’s slowly handed over management and operation of public buildings to a private company. All state-owned real estate is on the chopping block—from college campuses and prisons to state parks. The company, the Chicago-based Jones Lang LaSalle, is the world’s second largest commercial real estate brokerage. While running for office in 2010, Haslam held a financial stake in the company. He might still be invested but we don’t know for sure—he’s since placed many of his investments in a blind trust. The governor clearly hasn’t read our new report, How privatization increases inequality. …

Every state has a procurement office. Have you checked what yours is up to? In Tennessee it was through this office, charged with overseeing the state’s purchases and contracts, that Governor Bill Haslam concocted the biggest privatization scheme you’ve never heard of. And he would have gotten away with it, too—if it weren’t for a tough campus-workers union that discovered his plans and launched a raucous fight. … In 2014 he began taking quiet steps to outsource more than 10,000 state workers. Several well-paid consultants joined his administration, including one who gets paid more per hour than any other state employee. They began work in the little-known, slickly titled Office of Customer Focused Government. The plan they cooked up was unprecedented. Management and maintenance of literally every piece of state property would be privatized—campuses, parks, even armories—costing the jobs of 1 in 5 state workers. Billions in revenue would be funneled to a single private company. It’s rumored that one of the top contenders is Jones Lang LaSalle, already a state contractor and a company where Haslam has a record of personal investment. … As soon as UCW heard about the privatization scheme in August 2015, it leaked the plan to the press and launched a campaign called “Tennessee Is Not for Sale.” A town-hall phone call for members attracted hundreds of participants. Days later, 200 workers, students, and community allies lined the main avenue that cuts across the flagship campus in Knoxville. The union brought some signs and banners, but the best ones came from facilities workers, who showed up to the Thursday-afternoon rally in uniform. Of all the workers on a campus, we’ve found facilities workers to be some of the toughest to organize. They cover a variety of shops—carpentry, air conditioning, electrical, painting, custodial, housekeeping, and clerical and administrative support staff. They tend to be a tight-knit group, and sometimes insular. But this crisis inspired record numbers of facilities workers to mobilize, and many to join the union. … Now that it’s too late to ram through outsourcing in secret, Haslam is trying to persuade the public that outsourcing isn’t so bad. The administration’s message in the press is that the private contractor will rehire “qualified and productive employees” of the state. Supposedly their new benefits packages will look the same, or even slightly better. The governor is insinuating that the savings will come from cutting those who are unqualified and unproductive—a familiar line of attack against public employees. But so far, workers and the public aren’t buying it, in part because Haslam’s credibility has already been so damaged by the campaign. Our message, “Tennessee Is Not for Sale,” is clear and direct. People get it. …

Calling for Gov. Bill Haslam to stop trying to treat Tennessee like a business, United Campus Workers from MTSU rallied outside a Pilot store on the governor’s birthday in opposition to a looming plan to outsource state jobs. About 10 workers stood along the crowded road shouting “Tennessee jobs are not for sale!” and “Stop treating Tennessee like a business!” … State officials assured legislators earlier this year “qualified and productive” employees wouldn’t lose jobs or suffer pay and benefit cuts as a result of privatization. In addition, campuses and other state departments will be given the option to participate in a state contract after the matter is complete. Six universities, including MTSU, would save $10.9 million year two of a contract if they all opted to use it, according to a state justification study. The Officer of Customer Focused Government told lawmakers savings would come through better training, in-house work and large scale buying power. MTSU President Sidney McPhee has said he doesn’t favor outsourcing, according to Principe, though he hasn’t made such an official statement. … As part of the state’s FOCUS Act, higher education is being realigned, and MTSU and five other state universities operated by the Tennessee Board of Regents will be governed by newly-appointed boards in a year and a half. McPhee appointed faculty and staff to work on transition from this past July through November 2017. A 10-member board, including a student and faculty member appointed by the Faculty Senate, will oversee the university and hold the authority to hire and fire the president, adopt budgets, set mission statements and recommend tuition rates. The governor will appoint eight of the voting members, three of whom must be alumni, with confirmation by the General Assembly. …

As Gov. Bill Haslam faces questions about whether his appointees to one state board financially helped his family company, Pilot Flying J, he’s also getting hit with new criticism over his statewide outsourcing plan. On Monday, the state is launching an independent accounting review as to whether the proposed outsourcing will have cost savings as claimed. However, the state is also starting a process that allows potential bidders to handle the outsourcing to help craft the proposal for such bids, as the Chattanooga Times Free Press reports … Democrats in the Legislature are already vocally decrying the plans, as recent investigative reporting has shown other outsourcing pushed by the Haslam administration, such as the motor pool, has actually cost the state significantly more money. …

Critics of Gov. Bill Haslam’s efforts to privatize most state building management services say the administration should complete a promised independent accounting review of claimed cost savings before engaging with potential bidders in an experimental process for developing government contracts. Instead, beginning Monday, the Republican administration is doing both at the same time. Democratic lawmakers and a higher education union official say that’s putting the proverbial cart before the horse. … The administration’s Office of Customer Focused Government claims the state can save $36 million a year by outsourcing 90 percent of building management in general state government and higher education. The state’s real estate portfolio comprises more than 7,500 structures totaling 94 million square feet. Cleaning, repairing and operating them costs an estimated $550 million a year. Locally, the shift could affect the University of Tennessee at Chattanooga; Chattanooga State and Cleveland State community colleges and Moccasin Bend Mental Health Institute. While critics question why the KraftCPAs review and negotiations are occurring simultaneously, Michelle Martin, spokeswoman for the Office of Customer Focused Government, said officials are simply “gathering information through a multi-step, procurement process.” …

Tennessee Democrats and a union that represents campus workers are calling on Gov. Bill Haslam to release a study into outsourcing. They say the Haslam administration needs to show privatizing government services has worked before going ahead with more plans. The Haslam administration agreed in March to do the review. It came after lawmakers demanded more evidence that outsourcing works. … The Democrats’ list of failures include outsourcing maintenance of state vehicles, a deal with a Chicago real estate firm to manage state office buildings and the botched rollout of online standardized tests. They want a public hearing before more contracts are put out to bid. The Haslam administration insists outsourcing is saving taxpayers millions.

A union representing thousands of college workers in Tennessee on Monday released hundreds of comments slamming the governor’s proposal to outsource facilities management on public college campuses. The comments, which were collected by the state during a public comment period and sent to reporters by United Campus Workers, reiterated concerns that have been voiced by the union, lawmakers and college leaders for months. Of about 400 comments, almost all of them were critical of Gov. Bill Haslam’s proposed plan, with many commenters suggesting the plan would lead to lost jobs or slashed pay for current employees and a lower quality service on campuses. … During a phone conference Monday organized by United College Workers, state Sen. Lee Harris and Rep. John Ray Clemmons ripped Haslam’s plan and called for more rigorous legislative oversight of similar state contracts. Clemmons, D-Nashville, repeatedly referred to the outsourcing plan as a “scheme” that was plotted out behind closed doors to benefit Haslam’s “friends” and political allies. … In February, on the heels of that push-back, the state agreed to hire a third party to evaluate potential savings that could be made through outsourcing. Martin said that review is being done by Nashville-based Kraft CPA, adding that a final report should be made public in November. …

An exclusive NewsChannel 5 investigation has uncovered new questions about a major Haslam administration plan that was supposed to save taxpayers’ money. But our investigation discovered that effort — to turn the state’s vehicle operations over to private companies — is costing millions of dollars more than lawmakers were told. … While state employees once handled most maintenance of state vehicles, the Haslam administration outsourced the work to a private company. A fleet of state vehicles were once kept on standby for state workers, but that job was outsourced to Enterprise’s WeCar program. The administration also sold off hundreds of state-owned trucks and cars, choosing instead to lease them — all supposedly to save money. But a careful analysis of state budget documents suggests the state’s motor vehicle management operations have consistently blown through the budget numbers given to state lawmakers, now costing taxpayers more than ever. In 2011-2012, the Haslam administration proposed a motor vehicle budget of $32.5 million dollars, but they overspent by more than $10 million. The next year, they were $11 million over budget. And in 2014, they overspent by $12 million. …

The state is inching forward in its long-running review of a proposal to outsource facilities management on college campuses and other government-owned properties. Gov. Bill Haslam’s administration has expressed interest in the idea for some time. In April, the Haslam administration released a request for qualifications, or RFQ, to gauge interest from businesses that might participate in the proposed plan to outsource facilities management at a number of its properties — including colleges, prisons and state parks. The deadline passed Thursday, and the state will begin fielding presentations from the interested businesses later this month. … The state uses Chicago-based JLL to manage roughly 10 percent of its facilities. An internal report released in March suggested privatizing the management of residence halls, student centers and other properties across the state could save $36 million annually. Critics have said outsourcing would translate to subpar services, particularly for colleges, and slashed pay and benefits for employees. Haslam has said the savings are possible without layoffs or cuts to pay or benefits. …

For nearly a year, members of the United Campus Workers union, like McDaniel, and others have protested a plan by Gov. Bill Haslam that would allow outsourcing of maintenance and management of public buildings, including on college campuses. The state has repeatedly said each campus would be allowed to opt into or out of the plan, which has been met with scepticism by the union. But now, that decision to opt in or out may come at the same time the Knoxville campus has a new chancellor. Based on state timelines, campuses are expected to make decisions in early 2017, and UT President Joe DiPietro said Tuesday he hoped to have a new chancellor in spring 2017. …

… The plan, if all departments participate, is projected to save $35.8 million by the second year of a contract for building operations and services – with the requirement state workers keep their jobs, with comparable pay and benefits as long as they perform. The contract would be available for all state properties, enabling colleges and universities, for example, to compare their costs to the contract in deciding whether to opt in, according to Cowles. … The Department of General Services started moving on the process in 2015, much to the chagrin of state employees, primarily United Campus Workers, who contend their jobs and pay will suffer. They rallied during the recent legislative session and then petitioned the governor again in late April. Several state lawmakers also raised questions about the office’s plan when it went before the Senate State and Local Government Committee in March. Some called it “corporate rhetoric,” while others said it “strains credulity.” … In early April, the state made a request for qualifications from potential facilities management service providers to determine whether they can do the job. … The state appears to be head over heels in love with Chicago-based JLL, saying it has saved the state $10 million since it took over facilities management a few years ago. Cowles points out in his presentation JLL is ranked the city’s best employer by the Nashville Business Journal. United Campus Workers is questioning why the office started looking for qualified vendors before the independent review is complete. It also is pointing out the state is continuing to change its tone throughout this situation, now softening its stance to say colleges could choose just to go with a landscaping portion of the contract or janitorial services, for example.

… The governor’s facilities management outsourcing initiative is apparently the largest ever attempted by a state government. When a request for information was issued last summer to gauge interest from potential contractors, it proposed a contract covering the operation and maintenance of virtually all state-owned property, including office buildings, state parks, college and university campuses, prisons, armories and hospitals. In March, the outsourcing team issued a “business justification” for the plan estimating that it could save taxpayers $36 million a year if fully implemented, even while protecting current employees’ jobs — although their employment would be transferred to the contractor. Cowles acknowledged at the time that no firm cost comparison would be realized until a contract is bid and negotiated. Largely at the request of higher education officials, Haslam agreed to hire an outside consultant to evaluate his team’s estimates of savings and the state on March 17 started the process of selecting a contractor to perform that work.

The state took steps Monday to review possible options for outsourcing facilities management on college campuses and other government-owned properties. An internal review released last month by Gov. Bill Haslam’s administration suggested privatizing the management of residence halls, student centers and other properties across the state could save $36 million annually. On Monday the state released a request for qualifications, or RFQ, that will allow businesses to express interest in participating in the proposed outsourcing plan. … Critics have said outsourcing would translate to sub-par services, particularly for colleges, and slashed pay and benefits for employees. Haslam has said the savings are possible without layoffs or cuts to pay or benefits.

While proponents of the plan say the effort will result in taxpayers saving millions of dollars, Chris Dauphin, the organization’s communications director, questioned the $35.8 million in estimated savings. The figure was mentioned by Terry Cowles, director of customer-focused government, during a presentation to the Senate State and Local Government Committee in early March. On Tuesday, Dauphin told the same committee that the state can save money without having to outsource the facilities management on every state property. … Dauphin advocated for a more common-sense approach before warning that outsourcing could result in cost shifting down the line. He said a private company could decide to have annual rate increases, pointing to a contract between the Texas A&M University system and Compass Group USA, an outsourcing company, that resulted in students being forced into paying more for meal plans as a result of the privatization plan. Dauphin also explained that the 1,647 state workers at the university were forced to reapply for their jobs, with only 600 being rehire

State and University of Tennessee employees told a Senate committee Tuesday that if Gov. Bill Haslam’s plan to outsource the operation and maintenance of all state property and buildings sounds too good to be true, it probably is. The Senate State & Local Government Committee heard presentations from the Tennessee State Employees Association and from Tom Anderson, a buyer in UT’s Facilities Services office — the first time that workers have testified formally in a legislative committee since the massive outsourcing initiative was publicly revealed last August. … Dauphin also said private contractors often charge extra for services not specified in a contract. He read Texas media reports to the committee of “cost shifting” by the private vendor at Texas A&M University, which the governor’s outsourcing team says is a model for facilities management outsourcing. …

Gov. Bill Haslam’s administration claimed Tuesday that its plan to outsource management and operation of all state-owned buildings and real estate will save $35.8 million a year if existing state employee jobs are protected and all state property is included. Almost a third of that, or about $10.6 million, is projected for the University of Tennessee’s statewide campuses if existing employees are protected, according to a long-awaited “business justification” for outsourcing virtually all state real estate and facilities management to a private contractor unveiled Tuesday in a legislative committee.

Legislators questioned the need for Govenor Bill Haslam’s outsourcing proposal in a State Senate and Local Government Committee meeting on Tuesday. During the meeting, Director of Customer Focused Government Terry Cowles, Finance Commissioner Larry Martin and Gov. Haslam’s Chief Operating Officer Greg Adams gave a presentation to justify outsourcing the management of state facilities to private companies. … The business justification contained language that echoed a joint statement on outsourcing released in February, which said that contract service providers will be prohibited from reducing the workforce, and that “no current qualified and productive facilities management employee will lose their job as a result of a contract.”

Gov. Bill Haslam’s administration announced Wednesday that it has agreed with higher education leaders to have an outside group review the Republican’s privatization plan for building maintenance at Tennessee’s public colleges and universities. Haslam plans to release his “business justification” for his privatization efforts by the end of the month. The governor has said the University of Tennessee and Board of Regents systems would be given the choice of opting out of the plan and emphasized that any deal would preclude any reduction in the number of employees over the length of the contract. … In a joint statement, University of Tennessee President Joe DiPietro and Regents Chancellor David Gregory agreed to consider the third-party review and said that no decision has yet been made on whether to proceed with the privatization proposal.

About 35 campus workers, students and community members met in the Haslam College of Business building Monday afternoon to share information and further organize the movement against Gov. Bill Haslam’s privatization plan. Ben Bergman and Sawyer Smith, UT students and members of the Roosevelt Institute, gave a brief presentation that summarized the perceived consequences of Haslam’s proposal to outsource campus jobs to private corporations.

Some UT students are tired of lawmakers in Nashville as seeing their actions as attacks on the university and higher learning. Many attended a rally on Friday to address their growing concerns. This follows a sit-in organized by students in January. Both events come from Governor Bill Haslam’s proposal to look at options to save state administrative costs. … Also, the proposal would cut the UT’s Office for Diversity and Inclusion’s funding in half to a $2.5 million cap. Students at the rally voiced their the disapproval of the potential cuts by claiming that the university was “not for sale.” …

Days after the head of Tennessee’s community and technical colleges announced those institutions would not outsource management of their facilities, leading members of Gov. Bill Haslam’s Cabinet said it was too soon to accept that decision. …

We have said several times in this space that government should not be a job-creator. Finding efficiencies that save taxpayer dollars, while not adversely impacting the delivery of services, should always be the goal. From that standpoint, Haslam is on target. Outsourcing, though, is not without a human cost. Employees usually lose jobs. Those who are rehired by the private service providers usually see a decrease in wages and benefits. They lose spending power, for example, which could impact the state’s sales tax collections. It also means that these employees have less income to invest in their families and the organizations they support. … The big questions that need to be answered is whether the savings will justify the potential upheaval of employees and, if so, what does the administration plan to do with the savings? Will the money be used to mitigate the annual hike in college tuition? Increase public school funding? That is what the “business justification” report needs to make clear.

Gov. Bill Haslam’s top finance assistant, Finance and Administration Commissioner Larry Martin, says he believes it’s “premature” for Tennessee Board of Regents Chancellor John Morgan to remove community colleges and colleges of applied technology from the governor’s facilities management outsourcing project. Martin said Tuesday that he believes such a decision should be made after the administration’s “business justification” for outsourcing is finished. That document — detailing cost savings the administration expects from outsourcing — will be completed by mid-February, architects of the outsourcing project told state legislators Tuesday. … Morgan’s letter also detailed a list of concerns he has with the overall outsourcing project as it relates to higher education institutions — particularly with regard to protecting building maintenance employees, with control over a campus’s buildings and grounds, and with defining precisely what services a building contractor will perform under the contract.

Murfreesboro businessman Tom Hyde felt the sting of Tennessee’s privatization practices two years ago when a representative of Jones Lang Lasalle notified him he would have to pay the company a commission as part of his next lease agreement. … Tennessee’s contract with JLL for facilities management, which jumped from $1 million to $10 million to oversee about 10 percent of the state’s property, has come under the most criticism, especially as Gov. Bill Haslam’s administration studies more outsourcing. … Tennessee’s contract with JLL did not go through legislators on the Fiscal Review Committee but was vetted instead by the State Building Commission. It’s made up of Gov. Haslam, Lt. Gov. Ron Ramsey, House Speaker Beth Harwell and constitutional officers. Sen. Bill Ketron, who co-chairs the Fiscal Review Committee, said it has “no knowledge of what communications were made between the state and landlords prior to the awarding of the contract.”

Her comments came as she and other University of Tennessee at Chattanooga workers, ranging from maintenance workers to facilities management engineers, described their commitment both to their jobs and the campus community during a fact-finding session hosted at the university by three Democratic lawmakers, including Rep. JoAnne Favors, D-Chattanooga. About 60 UTC workers, students, community supporters and United Campus Workers officials showed up for the session, the second campus stop of a statewide tour by Senate Minority Leader Lee Harris, D-Memphis, and Rep. John Ray Clemmons, D-Nashville. … Some two-thirds of state workers involved in facilities management under the Department of General Services lost their jobs when Chicago-based real estate giant Jones Lang LaSalle took over. Haslam says the state saved $12.9 million over a two-year period, but critics note the governor’s administration and Jones Lang LaSalle touted even higher savings. Critics also question whether the cost comparisons are valid.

State Democratic lawmakers will bring their continuing series of fact-finding hearings on state privatization efforts to the University of Tennessee at Chattanooga on Tuesday as they hold seek comments from campus employees, students and faculty on the effects of outsourcing additional state jobs. … Lawmakers will hear from the United Campus Workers, the Tennessee State Employees Association, UT Chattanooga College Democrats and Statewide Organizing for Community eMpowerment (SOCM).

Roughly 45 people joined McDaniel in Nashville on Friday to protest any move by Gov. Bill Haslam to outsource state jobs on a broader scale. The protesters, organized by state higher education employee union United Campus Workers, delivered petitions with 6,368 signatures of Tennesseans who oppose any expanded outsourcing. … Right now about 10 percent of the state’s square footage is maintained by Chicago-based JLL. The administration and supporters argue the move helped the state avoid roughly $13 million in maintenance costs in two years, but opponents argue the state is gaming the numbers and any expansion of the program will mean cuts to wages and benefits for state employees.

In his email last week to Leslie Hafner, a Haslam adviser, Rep. Andy Holt, R-Dresden, said he has been contacted by more than 30 employees at the University of Tennessee at Martin, which is located in his West Tennessee district. … The administration says it has saved $12.9 million through “cost avoidance” and improved services over the past two years through a contract with real estate giant Jones Lang LaSalle. In his email, Holt questions that, asking “where are the independent, third-party reports showing that this actually saves the state money? I think people are growing very critical of the administration’s handling of this situation.” David Smith, Haslam’s communications director, reiterated Monday that no decision has been made. But he defended the administration’s current cost savings and search for new ones.

Rep. Andy Holt, R-Dresden, and Sen. Richard Briggs, R-Knoxville, said they’ve heard from public university employees in their districts who are scared and nervous. Both lawmakers agree it’s important for the governor to make sure the state is spending its money wisely. But at this time, they’re not sure privatization would offer any benefits to their constituents at the University of Tennessee at Martin or the University of Tennessee at Knoxville. … Holt and Briggs said they haven’t seen any information that says the privatization will save the state considerable amounts of money. In a recent presentation, the administration argued JLL spent $5 million less on maintenance at facilities during its first year managing them. During that presentation, though, House Finance Chairman Charles Sargent, R-Franklin, argued that the drop could be a sign the state is just spending less on maintenance. …

Republican Gov. Bill Haslam said Monday that critics are drawing the wrong conclusion from his administration’s ongoing efforts to save money and that he’s “not trying to outsource the entire state.” … The governor’s comments came after a Times Free Press story on Sunday showing Haslam and other officials included controversial plans for additional outsourcing, which would include most state building operations and maintenance functions to private companies, in the state’s presentation this month to Wall Street credit-rating agencies.

… This is an initiative that would affect thousands of state employees, students at state institutions of higher learning and taxpayers, and it has the potential to create extremely lucrative paydays for a state contractor. The merits of the proposal are subject to debate, but its feasibility and the potential savings it might create ought to be assessed in an open and transparent manner. And yet its managers have admitted to state legislators that email communications about it should be limited out of concerns that information might be released “prematurely” through public records requests. Public records requests by media outlets have produced most of what we know about the initiative so far.

Haslam administration officials have clamped down on what the public can learn about possible efforts to outsource more of state government. As they tried to put forward a “simple and positive message” to state lawmakers, one official acknowledged Tuesday that staff members have been discouraged from using email or putting other deliberations in writing. … Administration officials are now considering whether to outsource even more state buildings to a big corporation. In their presentation to the Fiscal Review Committee, they bragged to lawmakers that the first phase of that outsourcing effort has worked well so far. Two years ago, the state outsourced the management of state office buildings to the Chicago-based corporation Jones Lang Lasalle. … But our NewsChannel 5 investigation uncovered an internal timetable showing that the privatization push was on a faster track than the governor had previously admitted. …

Officials mulling over the privatization of operations at state buildings, college campuses, prisons and armories are being discouraged from putting their thoughts into emails. Terry Cowles, who is in charge of Republican Gov. Bill Haslam’s office of Strategies for Efficiency in Real Estate Management, or SEREM, told reporters Tuesday that the group “put that control in place” to prevent the release of what he called premature or incorrect information. … Records obtained by WTVF-TV in Nashville last month included a timetable for outsourcing state facilities that appeared at odds with the governor’s public assertion that any decision on whether even to proceed with privatization was still months away. …

As the debate surrounding privatization drags on, the list of concerned parties grows larger and larger. Today, employees in Facilities Services, members of the Progressive Student Alliance, United Campus Workers, College Democrats and two Tennessee legislators will congregate to discuss wage reductions, layoffs and privatization plans for UT’s campus and beyond. This discussion is in response to protests from UT workers and students alike to Haslam’s proposal, fully exposed via a state government Request for Information, to outsource state jobs to private contractors. … State Rep. John Ray Clemmons and Senate Minority Leader Lee Harris will head up the dialogue among the voluntary UT representatives at the Frieson Black Cultural Center at 11:30 a.m. Harris commented in an Oct. 2 press release that the proposal represented the state’s tendency to “operate in a bubble and over-rely on consultants.” … Clemmons spoke about his and Harris’s plans to directly engage with students, employees and other representatives present at today’s meeting as such a plan pertains to the livelihood of hundreds of UT and state employees.

Two Democratic state lawmakers are headed to the University of Tennessee’s campus this week to learn more about the effects of Gov. Bill Haslam’s plan to privatize some of the school’s services. … Haslam’s plan would allow private companies to operate or maintain some state-owned facilities, including those at prisons, parks, hospitals and universities. Haslam thinks the plan could make some departments more efficient. Opponents say it would destroy thousands of jobs, and they question whether it would actually save the state money.

ETSU employees, students and local activists rallied on Tuesday in response to Gov. Bill Haslam’s request for more information on outsourcing management jobs across the State of Tennessee. … Many state employees, ETSU employees among them, are concerned about the stability of their jobs in light of the efforts to consider outsourcing. While Haslam has not released any formal decisions regarding outsourcing possibilities, outsourcing consultants are currently being paid $612,000 annually by the state.

Gov. Bill Haslam’s administration is paying more each month to three consultants retained to develop plans for privatizing management of all Tennessee government-owned real estate than it paid in salaries to four state employees assigned to the effort, state figures show. … Total monthly salaries for the four state employees thus total $37,997. Martin noted that the employees may have other responsibilities in addition to SEREM. Baskin, for example, is deputy director of the state Department of General Services. The combined average monthly payment to the three consultants totals $47,288 under the arrangements explained by Martin, though she said precise figures of payments actually made were not available Friday.

In an uncharacteristically passionate defense, Governor Bill Haslam beat back criticism of a wide-ranging privatization plan on Thursday. He says Tennesseans should want his office looking to save money through outsourcing property management of state buildings, thereby leaving money for more important duties, such as education. … Haslam points to recent instances of outsourcing reversals. Engineering for road projects have been brought in-house at TDOT. The Tourism Department has moved some marketing from contractors to state workers because it saved money. But internal emails, made public under the state’s open records law, do give the impression the Haslam Administration would prefer letting a private company take over property management, even though the consultant hired by the state has found less potential for savings than first thought. Haslam says everyone needs to take him at his word.

Gov. Bill Haslam said Thursday he’s hasn’t decided yet whether to ask for an increase in transportation funding, including a gas tax hike, and insisted that a decision on outsourcing management and operations of all state-owned property is still months away. … Responding again to questions on the controversial work underway by top aides exploring outsourcing the management and operations of state-owned buildings, parks, prisons and other facilities, including college and university campuses, the governor said, “We don’t start with any predisposition toward privatizing things. And we have not made a decision.”

… JLL officials convinced the administration to outsource office buildings in 2013 after the state paid the company a million dollars to study the condition of those buildings. A slide prepared by JLL showed the “expected results” would be savings of $18.8 million a year — $94 million over five years. … After the state put the facilities management contract up for bids, JLL won the job after projecting cost savings this time of $13 million a year. A big chunk of that came from slashing security on state buildings by more than 90 percent. … Then, when the contract was announced, JLL said it would save $50 million over five years — in other words, $10 million a year. … But in a recent memo that Padgham helped draft that $10 million a year was down to $8 million. … We showed Clemmons a chart offered up by the governor’s office showing those savings are now down to $5 million a year — a long way from the $13 million that JLL promised in its bid, even further from the $18.8 million it first said could be “expected.” … The Tennessee State Employees Association has now called for an independent audit to determine which, if any, of those numbers are real. That JLL spokesperson said the full scope of the problems inside those office buildings did not become apparent until company officials began working inside on a daily basis. And it turns out, the state wasn’t spending as much on utilities as the company thought — which cut down on the potential savings.

…While the legislature will not have a say in the matter, lawmakers from Knox County say they would like proof any possible changes would be worthwhile. … The goal is spelled out in the documents and internal emails that say, “The state ideally wants to have the private sector provide all of these services with as little involvement by the State as necessary.” But the documented figures show the numbers do not currently back up a privatization plan at the University of Tennessee. National benchmark figures for what it would cost a private company to conduct maintenance on campus show a price 51 percent greater than what is currently spent at UT per square foot.

… United Campus Workers, which has members at the University of Tennessee, the University of Memphis and 14 other state college campuses, cited revelations from internal Haslam administration documents obtained by Nashville’s WTVF Channel 5 that call into question whether the massive outsourcing initiative would save taxpayers money. … A secret timeline for the project, revealed in the leaked documents, calls for all state real estate to be privately managed by next July 1 under a state contract.

Internal documents and emails indicate that top officials in Gov. Bill Haslam’s administration worked for months trying to put together estimates justifying their plans to privatize the management and operations of all state-owned real estate, including the state’s public college and university campuses.

State colleges will make ultimately their own decision on whether to outsource the management of campus buildings, but Gov. Bill Haslam said he hopes higher education leaders will consider the option “if it’s a proposal that makes sense.” … Haslam, who was at the Knoxville Chamber on Thursday morning for a transportation round table, also cautioned that he is a long way from making a decision about whether to move forward with plan to outsource the management of state-owned buildings. … Anxiety heightened when a confidential timeline that was first obtained by WTVF, Channel 5, showed an Oct. 19 deadline for the state to issue a “request for quotes” from interested companies. Haslam said Thursday “that’s not my timeline.”

… The United Campus Workers, Knoxville’s higher education union, has been fighting for a living wage for years. Now, not only do they risk losing all progress made by the Living Wage Campaign, but they could lose their jobs entirely. … What’s more, there is not much evidence to suggest that this plan will be worth the drastic overhaul it entails. Based on past privatization efforts, this proposal will likely result in minimal fiscal benefit. A 2015 case study at Tennessee Technical University suggests that savings would be insignificant. After privatizing custodial services, TTU only saved around $100,000. The university fired its local custodial staff and cut pay for future workers, diverting a majority of the “saved” money to an out-of-state contracting firm.

A case study of outsourcing in two public universities in Tennessee. A unique data set that shows both the university costs of providing services and the private costs of providing custodial services. Results: privatization does not improve cost efficiency and large negative effects on former public employees.

Tennessee Gov. Bill Haslam appears to be on the brink of privatizing state government. But he won’t be able to do it without a battle, especially from university unions and Democratic lawmakers. … Tennessee is a year and a-half further along in the process for “public-private” partnerships at state parks in which companies would run restaurants, inns, marinas, golf courses and conference centers. … While state parks are integral to the Tennessee experience, Haslam doesn’t consider golf courses and marinas part of the core of state government. … Haslam and the Republican-dominated Legislature will want to cut costs, no doubt. But they’ll be doing so by eliminating tens of thousands of jobs across Tennessee, from National Guard sites to state parks and colleges and universities.

This afternoon, a protest organized by members of United Campus Workers, the Progressive Student Alliance, Facilities Services workers and others will take a stand against Gov. Bill Haslam’s proposal to privatize management at the university and across the state. … Anderson said he and his peers at United Campus Workers hope the protest will invite critique of the subtle progression of Gov. Haslam’s proposal — a proposal that was not made aware to Tennessee workers or legislators until nearly two weeks ago.

The Tennessee State Employees Association called for a halt to the governor’s sweeping privatization efforts until a third party can review existing facilities-management outsourcing contracts to see whether they have saved taxpayers money. The Haslam administration, beginning four years ago, began outsourcing the management and operation of several state office buildings to the multinational property management giant Jones Lang LaSalle, headquartered in Chicago. … Haslam told reporters that no decisions have been made regarding whether to proceed with any or all of the privatization proposals. But a confidential state timeline for the facilities management contract process calls for the state to issue a “Request for Quotes,” or bids, on Oct. 19, with responses due Jan. 22, a notice of the state’s intent to award a contract on Feb. 16, the opening and scoring of bids on June 22, the issuance of a contract on July 13 and the start of privatization contract next Aug. 1.

The Tennessee State Employees Association today is calling for a halt to privatization efforts in Tennessee until a third party reviews all contracts to verify cost savings. … TSEA President Bryan Merritt said. “Before we lay off more workers and relinquish more taxpayer control, maybe we need a third party to study and prove these privatizing efforts are really saving money. We simply do not believe any company can provide the same level of services, with profit as a motive, and do it at a lesser cost than state employees.” Since FY10-11, according to the Tennessee Fact Book, 3,311 state employee positions have been eliminated in Tennessee. During that same time period, Tennessee’s population has increased by approximately 200,000.

…Just how would a private company be able to operate state parks and other building maintenance cheaper than the state and still be able to make a profit? I think we all know the answer to that. A company getting the contracts would likely hire immigrant workers to do the jobs, at slave wages and with no benefits. It is the only business plan that returns these bidders a profit and saves the state money. We are talking about people doing food service, janitors, landscapers and other maintenance jobs. … Here’s what’s happened to state employees under Haslam: Longevity pay has been eliminated, with no more raises for length of service; Civil Service has been abolished; new state employees can no longer keep their health insurance when they retire, even though they pay the full premium; pay raises are less than the inflation rate. But Haslam isn’t always for reducing benefits for state workers. When he hired his cabinet he upped the salary of some of them by up to $50,000 each. And he arranged for his departing chief of staff, Mark Cate, to get a $10,000-a-month contract with a nebulous job description with the state museum board.

MTSU’s chapter of United Campus Workers is ready to battle any state proposal to privatize university jobs, a move it believes could affect hundreds of employees and negatively impact the local economy. … Principe said he spoke directly with MTSU President Sidney McPhee about the matter and found him “clearly unenthusiastic.” He noted the president told him he felt universities statewide might have to make a case showing why they don’t want to be included in outsourcing. … As for university campuses, Haslam said state officials would “sit down” with each system, the University of Tennessee and Board of Regents, to decide if it “makes sense.” …

…But the governor has argued that the administration’s experience shows that privatization does save money. … The Nashville Democrat pointed to our NewsChannel 5 investigation of a contract that outsourced the maintenance of state vehicles to Bridgestone-Firestone. We found a headlight bulb that the state could have bought for $1.74 from a parts company on an existing state contract. Bridgestone’s charge: $12.34, plus another $23 for installation. There was also a no-bid contract with Enterprise Rent-A-Car. We went online looking for discount codes and found a mid-size car for $148 a week. The state’s price: $184.

Nashville-based Corrections Corporation of America, the largest operator of private prisons in the country, did not respond to a recent move from Tennessee exploring the idea of privatizing facilities management at prisons, colleges, parks and other state facilities. … The fact CCA didn’t respond to the request for information doesn’t prevent it from bidding on any related privatization. CCA housed 5,211 state inmates as of June 30 at three prisons in Tennessee, in addition to operating the Metro-Davidson County Detention Facility. The company faces scrutiny locally and nationally over violence and staffing issues.

Tennessee is not for sale. That’s what Tom Anderson and his peers at United Campus Workers have declared in response to Gov. Bill Haslam’s plan to privatize the management of state-owned properties at UT, thus outsourcing facility management to interested private companies. … Anderson estimated approximately 1,000 jobs are at risk for 700 employees work at UT Facilities Services and the remaining 300 who operate under housekeeping, dining management or other campus services. These individuals, according to Anderson, all will likely lose their jobs if Haslam’s outsourcing proposal baits enough interest.

…The request for information asks companies to provide their knowledge of and experience in managing facilities such as office buildings, college campuses, prisons, hospitals, parks and military installations. The scope of the work would include building management, emergency preparedness and facility-related purchasing, finance and accounting. Future components could include shipping and receiving, food service and coordinating special events. … The Haslam administration’s initial silence —the request for information was issued without any sort of announcement — is troubling, especially given the comprehensive changes that could result. The administration’s experience two years ago with outsourcing some of the state’s real estate management should have provided a warning that transparency is warranted. … The Haslam administration should make public any studies the state conducted or commissioned that delve into the pros and cons of privatization. Citizens deserve to be informed.

…Senate Democratic leader Lee Harris of Memphis said that saving money shouldn’t be the only measure when it comes to deciding how to run the government. … House Democratic Caucus Chairman Mike Stewart of Nashville called the governor’s initiative the latest move in his “privatization agenda.” … Stewart pointed to a no-bid contract awarded by the Haslam administration to Enterprise Rent-A-Car in 2011 to replace the state motor pool. That deal ended up costing the state $739,000 even though employees only used $450,000 worth of vehicles. … Thomas Walker, a spokesman for the United Campus Workers, said employees at public colleges and universities are worried about losing their benefits-paying jobs “in an outsourcing frenzy.” …

Because of the wording of the Request for Information from the Governor’s office, it’s unclear exactly how many workers at higher-education institutions like East Tennessee State University, Northeast State Community College and many others across the state could have their jobs outsourced to someone in the private sector. … Haslam has said that his intention is to improve efficiency in management and garner savings, but many groups opposed to this kind of mass outsourcing or privatizing cite past experiments within the state and nation that have failed, at a cost to taxpayers and institutions. …

… The governor defended the state’s decision to look for companies potentially interested in taking over facilities management, as a task covering a slew of different jobs, at Tennessee prisons, colleges, state parks, National Guard sites and other buildings. … The state outsources facilities management at several government buildings, including the Tennessee Towers. Chicago-based company JLL, previously known as Jones Lang LaSalle, drew considerable ire at the time it was announced. A 2013 audit noted JLL stood to benefit from recommending closure of some state buildings and questioned the state’s expansion of a $1 million contract to $10.7 million without any rebidding process. … The defense comes as Democrats and a union representing some employees at Tennessee colleges and universities bashed a recent “request for information” issued by the state. The document, dated Aug. 10, opens the door to the state privatizing facilities management at most government sites across the state.

Gov. Bill Haslam is pushing to privatize the management and operations of all facilities across state colleges, universities and government buildings, including those located at the University of Tennessee. Last Tuesday, Tennessee’s Department of General Services posted an online request for interested companies to submit proposals for “facilities management outsourcing.” The proposal claims that its intent is to analyze how UT and Tennessee Board of Regents properties are run, giving potential private companies a Aug. 21 for their responses to a vast array of affected properties and departments. … Such a scope at UT includes facilities services management, security, cleaning, repair, maintenance, utilities services, roads, grounds, preventive services, safety and emergency preparedness, facilities-related purchasing, recovery and disaster supporting planning. Potential affected areas, according to the post, are also not limited to food service operations, special events set up, delivery and set up, dock management and administrative site services that oversee conference catering

In a move that could newly privatize many state jobs, the administration of Gov. Bill Haslam is exploring the idea of outsourcing “facility management services” at Tennessee facilities that include prisons, public colleges and universities. Several state office buildings are already operated through a controversial contract with JLL, a Chicago-based property management company previously named Jones Lang LaSalle. A 2013 state audit criticized the Department of General Services for the contract: The audit noted a “conflict of interest” for JLL that created an opportunity for the company to earn more outside money through its recommendations to the state and criticized the state for expanding its initial $1 million contract with JLL to $10.7 million without any rebidding process. …

… The administration was criticized two years ago for turning a $1 million contract with JLL to assess the condition of six state office buildings into a multimillion contract outsourcing the operation of several buildings housing the central offices of several state agencies to the same company. … General Services Department spokesman David Roberson said the RFI “is just part of an information-gathering process. There’s been no firm decision made about the issue involved. DGS is simply examining options for reducing administrative costs of state government, which is what all departments should be doing. … However, a timeline for the project given to UT Knoxville employees last week indicates the administration wants to have a contract issued by next spring and a contractor in place at the start of the next fiscal year July 1.

Despite a controversy over his outsourcing of state building operations, Republican Gov. Bill Haslam says he intends to continue looking at privatizing state government operations where he believes it is practical. …Haslam was referring to a contract with Chicago-based real estate services firm Jones Lang LaSalle to manage state office space. The contract takes effect July 1, and 126 General Services workers will lose their jobs….

…. Haslam argues the reviews don’t always lead to trimmed or eliminated programs, job cuts or privatization. “There’s other things we’re taking back” from private vendors, Haslam said. “I was talking to a highway contractor the other day who’s kind of mad about some things we used to let private contractors do that we’re bringing back in house” at the Department of Transportation…..

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